Equipment leasing can be a big plunge for a small business. You’re not flush with cash, so when you lease a major piece of equipment, you’re sinking a comparatively large chunk of your company’s bank account into that transaction, albeit not all at once.
This is where a Section 179 tax deduction can make a massive difference.
We haven’t talked about Section 179 for a little bit, so here’s a brief primer if you haven’t been exposed to it or have simply forgotten what a deduction can do for you, excerpted from an earlier post:
The newest number for Section 179 is still $139,000 for equipment, which can buy you quite a few pieces if you’re not looking for heavy construction equipment. Bonus depreciation is still 50% for 2012, as well. And if we’re talking about capital purchases for your small business, the limit is a whopping $560,000. It’s fair to say that’s plenty for cash covered by 2012 Section 179.
You can see where I’m going with this. If you can take a nice tax break on up to $139,000 in equipment, that may make the difference between breaking the bank and actually being able to afford a critical piece of equipment. If there’s one thing every business owner becomes familiar with, ruefully or no, it’s how important equipment is.
So I’m urging you to explore the deduction now, well before the end of the year and well before you actually need equipment. If you can get this tax deduction, you won’t be pumping more money into the IRS that may just put your new equipment outside of the realm of affordability.
Keep in mind that these benefits drop dramatically in the years ahead, which means there really is no better year to replace your outmoded technology and troubled equipment than 2012.
Have you used Section 179 in the past?
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